A bitmap font is one that stores each glyph as an array of pixels (that is, a bitmap).
Scaling
Bitmap fonts look best at their native pixel size.
Many text rendering systems perform nearest-neighbor resampling, introducing ugly jagged edges.
A good system will perform anti-aliasing on bitmap fonts whose size does not match the size that the application requests.
This works well for making the font smaller but not as well for increasing the size, as it tends to blur the edges.
A "trace" program can follow the outline of a high-resolution bitmap font and create an initial outline that a font designer uses to create an outline font useful in systems such as PostScript or TrueType. Outline fonts scale easily without jagged edges or blurriness.